mr funny
14-11-10, 22:30
http://www.businesstimes.com.sg/sub/companies/story/0,4574,412653-1289505540,00.html?
Published November 11, 2010
PROPERTY EARNINGS
CityDev Q3 earnings inch up to $195.8m
Group selling two industrial properties to Sabana Reit for $347.4m
By KALPANA RASHIWALA
CITY Developments Ltd (CDL), which posted a 1.1 per cent year-on-year rise in third-quarter net profit to $195.8 million, said yesterday that it is selling two Singapore industrial properties - Pantech 21 and New Tech Park - for a total $347.4 million - to the soon-to-be-listed Sabana Reit.
Pantech 21 is a 99-year leasehold property at Pandan Loop that is being sold by Eccott Pte Ltd, which is fully owned by CDL. Eccott is selling the remainder of the 99-year leasehold for $41.5 million.
New Tech Park at Lorong Chuan is a 999-year leasehold asset that is being sold by Branbury Investments, in which CDL has a 42.8 per cent interest. Other companies in the Hong Leong Group, which is the parent of CDL, own the rest of Branbury. Branbury is selling to Sabana Reit a 45-year lease in this asset for $305.9 million.
Sales completion for the properties is expected to take place on the date when Sabana Reit is listed, around end-November. Eccott and Branbury will lease back the buildings for a three-year term during which they'll pay an annual rent to Sabana of $3.2 million and $24 million respectively.
The divestment of these two industrial buildings would take the total value of long-term investment properties sold by CDL so far this year to about $910 million, of which the group's share is about $731 million. Earlier divestments include North Bridge Commercial Complex, The Office Chamber, Chinatown Point, The Corporate Office and strata units at GB Building. These assets are mainly balance strata units and non-core assets of the group, and funds generated from their sales will supplement the group's already strong balance sheet and can be deployed for general corporate investment purposes. 'The group intends to identify and invest in projects which will have higher return on equity,' CDL said in its results statement.
The group had cash and cash equivalents of about $1.55 billion as at end-September 2010, up from $981.5 million at end-Dec 2009.
On the Singapore residential development front, the group is preparing to launch a 521-unit, 99-year private condo at Sengkang/Fernvale early next year. It also said that 85 per cent of the 150-unit The Glyndebourne project at Dunearn Road is sold. The project is owned by CDL's hotel arm Millennium & Copthorne Hotels.
For the South Beach project, CDL said that construction of the substructure is expected to begin either at end-2010 or early 2011.
For the third quarter ended Sept 30, group revenue fell 20.8 per cent to $745.5 million. Revenue from property development slid 51.2 per cent year on year to $235.2 million while profit before income tax (including share of after-tax profit of associates and jointly-controlled entities) declined 33.3 per cent to $116.1 million.
Though the group has achieved strong sales for its residential launches this year, it was not able to recognise some of the locked-in profits and revenues from the presales activities in the latest third quarter as either construction has not begun for these projects, or construction has yet to reach the recognition stage.
Profit from hotel operations doubled from $37.3 million in Q3 2009 to $74.8 million in Q3 2010. Profit from rental properties also rose from $35.5 million to $68.6 million.
For the nine months ended Sept 30, 2010, CDL's net profit improved 19.9 per cent to $499.8 million while revenue grew 3.7 per cent to $2.4 billion.
On the stock market yesterday, the counter closed 18 cents higher at $13.48. CDL said that without factoring in any fair value gains on investment properties, the group's gearing ratio continued to remain at a healthy 33 per cent. Interest cover for year-to-date Sept 2010 improved to 20.7 times (year to date Sept 2009: 13.0 times), 'attesting to the group's financial prowess', it added. This healthy balance sheet has enabled the group to raise $880 million of bonds year to date 2010 at competitive pricing. 'The bonds, coupled with the future cash collection from the group's pre-sold launched properties which are still under construction, will provide it with good financial resources and cashflow. The group will have the flexibility to meet its financing and working capital requirements as well as enhance its war-chest for new investment opportunities at the appropriate time,' CDL added.
The group also noted that no profit was booked in from sold-out or near sold-out projects such as Hundred Trees, 368 Thomson, Cube 8 and Tree House. 'These successfully launched projects whose locked-in profits have yet to be recognised will contribute towards the group's healthy earnings moving forward,' CDL highlighted.
Published November 11, 2010
PROPERTY EARNINGS
CityDev Q3 earnings inch up to $195.8m
Group selling two industrial properties to Sabana Reit for $347.4m
By KALPANA RASHIWALA
CITY Developments Ltd (CDL), which posted a 1.1 per cent year-on-year rise in third-quarter net profit to $195.8 million, said yesterday that it is selling two Singapore industrial properties - Pantech 21 and New Tech Park - for a total $347.4 million - to the soon-to-be-listed Sabana Reit.
Pantech 21 is a 99-year leasehold property at Pandan Loop that is being sold by Eccott Pte Ltd, which is fully owned by CDL. Eccott is selling the remainder of the 99-year leasehold for $41.5 million.
New Tech Park at Lorong Chuan is a 999-year leasehold asset that is being sold by Branbury Investments, in which CDL has a 42.8 per cent interest. Other companies in the Hong Leong Group, which is the parent of CDL, own the rest of Branbury. Branbury is selling to Sabana Reit a 45-year lease in this asset for $305.9 million.
Sales completion for the properties is expected to take place on the date when Sabana Reit is listed, around end-November. Eccott and Branbury will lease back the buildings for a three-year term during which they'll pay an annual rent to Sabana of $3.2 million and $24 million respectively.
The divestment of these two industrial buildings would take the total value of long-term investment properties sold by CDL so far this year to about $910 million, of which the group's share is about $731 million. Earlier divestments include North Bridge Commercial Complex, The Office Chamber, Chinatown Point, The Corporate Office and strata units at GB Building. These assets are mainly balance strata units and non-core assets of the group, and funds generated from their sales will supplement the group's already strong balance sheet and can be deployed for general corporate investment purposes. 'The group intends to identify and invest in projects which will have higher return on equity,' CDL said in its results statement.
The group had cash and cash equivalents of about $1.55 billion as at end-September 2010, up from $981.5 million at end-Dec 2009.
On the Singapore residential development front, the group is preparing to launch a 521-unit, 99-year private condo at Sengkang/Fernvale early next year. It also said that 85 per cent of the 150-unit The Glyndebourne project at Dunearn Road is sold. The project is owned by CDL's hotel arm Millennium & Copthorne Hotels.
For the South Beach project, CDL said that construction of the substructure is expected to begin either at end-2010 or early 2011.
For the third quarter ended Sept 30, group revenue fell 20.8 per cent to $745.5 million. Revenue from property development slid 51.2 per cent year on year to $235.2 million while profit before income tax (including share of after-tax profit of associates and jointly-controlled entities) declined 33.3 per cent to $116.1 million.
Though the group has achieved strong sales for its residential launches this year, it was not able to recognise some of the locked-in profits and revenues from the presales activities in the latest third quarter as either construction has not begun for these projects, or construction has yet to reach the recognition stage.
Profit from hotel operations doubled from $37.3 million in Q3 2009 to $74.8 million in Q3 2010. Profit from rental properties also rose from $35.5 million to $68.6 million.
For the nine months ended Sept 30, 2010, CDL's net profit improved 19.9 per cent to $499.8 million while revenue grew 3.7 per cent to $2.4 billion.
On the stock market yesterday, the counter closed 18 cents higher at $13.48. CDL said that without factoring in any fair value gains on investment properties, the group's gearing ratio continued to remain at a healthy 33 per cent. Interest cover for year-to-date Sept 2010 improved to 20.7 times (year to date Sept 2009: 13.0 times), 'attesting to the group's financial prowess', it added. This healthy balance sheet has enabled the group to raise $880 million of bonds year to date 2010 at competitive pricing. 'The bonds, coupled with the future cash collection from the group's pre-sold launched properties which are still under construction, will provide it with good financial resources and cashflow. The group will have the flexibility to meet its financing and working capital requirements as well as enhance its war-chest for new investment opportunities at the appropriate time,' CDL added.
The group also noted that no profit was booked in from sold-out or near sold-out projects such as Hundred Trees, 368 Thomson, Cube 8 and Tree House. 'These successfully launched projects whose locked-in profits have yet to be recognised will contribute towards the group's healthy earnings moving forward,' CDL highlighted.